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On Friday, January 10, the Supreme Court granted cert to the major broadcasters’ challenge to Aereo. This follows on the heels of a recent ruling questioning the legality of Aereo’s (and, increasingly, other TV-over-internet service providers’) business models.
Aereo’s TV-over-internet technology captures over-the-air digital television broadcasts and relays them as video streams to its users over the internet, which they can watch or record. Launched in New York City in 2012, Aereo has flourished and expanded its service coverage area. As one of the most successful TV-over-internet providers, the startup has faced numerous legal challenges by major broadcasting companies, centering on whether it has to get authorization from the broadcasting companies. Should Aereo and other TV-over-internet startups be required to pay retransmission fees for relaying over-the-air television broadcasts which are free to view in the first place?
To date, Aereo has been able to successfully argue, in multiple courts, that its service works like a “remote DVR.” Aereo’s argument relies partially on the 2008 Cablevision ruling from the Second Circuit. In Cablevision, copyright was not infringed when a distributor created a large number of remote DVRs, with the hardware at a remote location, and granted its users the ability to control the programs that would be recorded and accessed on one individual machine. In addition, Cablevision’s system stored separate copies of recorded programs for each user.
Aereo uses a similar arrangement: it provides, in its data centers, a tiny antenna for each of its customers, which they can control in order to capture over-the-air-broadcasts, effectively creating a “remote TV” system for each of its customers. And, like Cablevision, Aereo allows its customers to record the captured broadcasts and stream them over the internet, thus creating a remote DVR service.
Major broadcasters have challenged this model, arguing that Aereo should have to pay retransmission fees just like cable and satellite providers, even if Aereo is only retransmitting captured over-the-air broadcasts, which are freely available to begin with.
On one hand, the resolution of this case against the major broadcasters may substantially affect them since cable and satellite providers currently paying retransmission fees may stop and begin establishing systems similar to Aereo. On the other hand, a ruling against Aereo may significantly undermine the TV-over-internet industry and prevent consumers from using the more modern and convenient cloud to access over-the-air television. In either case, there may be extensive implications in copyright law and repercussions in the cloud computing and broadcast industries.
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